What’s the deal with Airbnb Savannah?
Savannah, Georgia has gone through a considerable amount of growth in the past year and this growth is expected to exceed historical averages. Tourism, port activity, business services, and above all, the housing market should set the stage for above-average employment and economic growth. This growth is definitely opening up new and attractive opportunities for investors thinking about investing in the Savannah real estate market.
The Savannah housing market is pointing towards one direction and that is UP! With the different combinations of industries and services, this city has an increased tendency for residential growth and economic stability. Savannah is known for its strong business in various industries such as manufacturing, distribution, tourism, military, port operations, health care, and an ever-growing presence of innovative tech startups and entrepreneurs. The Savannah real estate market currently is a great place to invest in.
The question that remains unanswered: should I invest in Airbnb Savannah or invest in traditional rentals? Which of the two is the optimal rental strategy for this city? Let’s find out.
Savannah Real Estate Housing Market Overview
The Savannah real estate housing market this year has proven to be in between both a buyer’s market and seller’s market– a neutral market. With the increased number of job opportunities and very low unemployment rates, so many people are heading towards Savannah. With the increased movement of people coming to Savannah, the demand for real estate investment properties is skyrocketing.
Here is the data related to Savannah that we collected from Mashvisor using our various real estate market analysis tools.
- Airbnb Occupancy Rate: 59.7%
- Airbnb Rental Income: $2,333
- Traditional Rental Income: $1,279
- Airbnb Cash on Cash Return: 3.16%
- Traditional Cash on Cash Return: 1.82%
- Airbnb Cap Rate: 3.16%
- Traditional Cap Rate: 1.82%
- Median Price: $416,362
As you can see, the median price of an investment property in Savannah is $416,362 which is considered a high number. But don’t let this number scare you off. There are affordable prices all over Savannah and one way to locate them is through our property finder tool or heatmap tool. Both tools will help you locate properties and see their sale price. With Mashvisor’s tool, you can use the different filters to filter out properties that don’t match your search criteria or preferred rental strategy. Take a look at some of the properties we were able to pull out using our property finder. We pulled out properties for both rental strategies (Traditional and Airbnb).
Do you have a free Mashvisor account? Click here to use our Property Finder and find properties in a matter of minutes!
Airbnb rental strategy
Property #1:
- List price: $145,000
- Airbnb CoC Return: 14.99%
Property #2:
- List price: $150,000
- Airbnb CoC Return: 14.45%
Property #3:
- List Price: $129,000
- Airbnb CoC Return: 14.43%
Traditional rental strategy
Property #1:
- List price: $60,000
- Traditional CoC Return: 10.20%
Property #2:
- List price: $62,000
- Traditional CoC Return: 9.81%
Property #3:
- List price: $65,000
- Traditional CoC Return: 9.27%
After analyzing the data we collected above, it is obvious that Airbnb Savannah is the optimal rental strategy. This does not mean that traditional investment properties are not profitable here. As you can see when we selected the traditional rental strategy on our property finder tool, we were able to pull out properties that offer high cash on cash return. Deciding on which rental strategy best suits you is up to you. Both will allow you to make money in real estate in no time.
So now it is time to ask yourself, what makes Airbnb Savannah so lucrative and appealing to so many real estate investors? Let’s find out.
The Secret to Why Airbnb Savannah Is So Attractive
It comes as no surprise that the secret to why Airbnb Savannah is so attractive is due to immense tourism. With all the charming historical districts, beach access, and recreation opportunities, tourism plays a very important part in the success of Savannah’s economy.
Savannah’s annual tourism study estimates that tourists spend about $2.67 billion here! Tourists don’t just spend their money in Savannah but spend a lot of their time there. This means that all these people need places to stay. For this reason, Airbnb Savannah is becoming and will continue to be the optimal rental strategy for this city. It is also a great opportunity for those investors interested in vacation home rentals. It would be a quick and easy way to generate a profit and positive cash flow from all these visitors.
With all that said, there are a lot of things to consider when investing in Airbnb Savannah or any other type of short-term rentals. This is why I provided the following tips to help you plot towards investing in Airbnb Savannah.
Read Also: Four Things to Consider Before Purchasing an Airbnb Investment Property
Tips for Investing in Airbnb Savannah
1. Pick a neighborhood or point of attraction
People from all over the country visit Savannah for various reasons. Some visitors come to enjoy recreational activities like fishing, boating or other watersports. Others come to see all the local attractions Savannah has to offer. And some come to relax and enjoy the coastal resorts and beautiful beaches.
If your investment strategy is to target this group of visitors, then you can benefit from Airbnb Savannah by renting out your property or even a room in your property in exchange for rental income. Choose a neighborhood which attracts these visitors. Look for available properties in a neighborhood or locale that best meets those visitors’ needs. Like I mentioned before, you can use Mashvisor’s property finder tool and heatmap analysis to help you find the best-performing properties in the best-performing neighborhoods that offer the highest Airbnb cash on cash return.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
2. Research costs
Just because property values in Savannah are quite reasonable compared to other “tourist destinations”, that does not mean that profitability is guaranteed. You need to do your research to determine your potential profitability. How? Through real estate market analysis, you can compare property prices similar to your property in your target area. You need to take into consideration expenses like property management, upkeep, insurance, taxes, etc. If you are considering purchasing a property to rent out on Airbnb Savannah, conducting a real estate market analysis and researching costs is a must!
3. Get financing in order
After you’ve located the area you want to invest in and determined what price points you need to make a profitable investment, you need to get your financing in order. Ask yourself how much “home” can I afford to buy? If you plan on applying for a mortgage loan, then check to see if your credit score qualifies you for one. If qualifying for a mortgage is not possible, then consider other property financing methods. To learn more about the different financing options out there, read 7 Easy Methods for Investment Property Financing.
4. Hire a real estate agent
Investing in Airbnb Savannah is not like buying a home just for yourself or your family. There are a lot of things to consider and keep in mind. You need to think about the location, market values, proximity to amenities and features that attract guests. That is why it is highly recommended that you hire a real estate agent to help you out. Look for an agent who lives in the area and is familiar with it. Look for someone who cannot only guide you to the right location but the perfect property to ensure you succeed in Airbnb Savannah as well.
A Final Thought
No matter where you are in the US or where you plan on investing, Mashvisor has everything you need to make smart investment decisions. Airbnb Savannah is on fire this year and is calling all real estate investors to seize the moment and start generating high profits!
To start your 7-day free trial with Mashvisor and subscribe to our services with a 15% discount after, click here.